News and Events

DTI Proposals on Boardroom Pay

  • Posted

The DTI has this morning issued a consultation document containing proposals on boardroom pay and on limiting 'golden farewells' for directors.

The Press Release indicates that the consultation document contains the following proposals:

1. limiting notice or contract periods to one year (or less) unless there are exceptional reasons for a longer period;
2. strengthening disclosure provisions on service contracts by requiring companies to provide a clear explanation to shareholders of any compensation agreements agreed by the board following the departure of a director;
3. requiring quoted companies to ask shareholders to vote on its remuneration report every year, or enabling shareholders to move a resolution on remuneration at the AGM.

Stephen Byers, Secretary of State for Trade and Industry, said "Most people recognise the need to pay a 'golden hello' to attract the best but don't understand the need to pay a golden farewell for failure."

Replies to the consultation document should be received by 29th October 1999. According to the press release, the consultation document is available at (but it was not there when I looked!)